Following recent stumbles within the global banking sector, not only on the litigation front where banks have paid over a quarter trillion in legal fees and settlements in the past several years, but also due to tumbling profits and more recently, compensation and staffing cuts, many speculated that recent generations of college and MBA grads would pick other career options over Wall Street. They were wrong.
Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke.
The International Monetary Fund’s (IMF) World Economic Outlook (April 2016) forecasts inflation to rise to 720 percent by the end of 2016. This number, which is nothing more than a guestimate, is now carved in stone. The media, from Bloomberg, the New York Times, the Washington Post, the Wall Street Journal, to countless other ostensibly credible sources, repeats that guestimate ad nauseam.
The drumbeat of negative sellside macro research reports continued over the weekend, when following virtually every other investment bank, Morgan Stanly was the latest to share "four charts you can't miss", key of which perhaps was the well-known fishhooks chart showing sliding forward EPS estimate every year (with 2014, 2015 and 2016 earnings all now virtually identical), as well as the observation that PE ratios are far higher currently than where they should be based on real TSY yields...
Every ugly nonfarm payrolls has a silver lining, and sure enough following Friday's disastrous jobs report, global mining and energy companies rallied alongside commodities after the jobs data crushed speculation the Fed would raise interest rates this month. “The disappointing U.S. jobs report on Friday means that a summer Fed rate hike is off the table,” said Jens Pedersen, a commodities analyst at Danske Bank. “That has reversed the upwards trend in the dollar, supporting commodities on a broader basis.